Norkom reports strong EBITDA and continued increase in revenues

Half Year Results for the Period Ended 30 September 2009

10 November 2009, Dublin, Ireland – Norkom Technologies, the leading provider of financial crime and compliance solutions to the global financial services industry, today reports strong EBITDA and a continued increase in revenues in its half-year results for the period ending 30 September 2009.

The company reports the following key financials:

• Revenue up 2% to €24.6 million in the six-month period to 30 September 2009 (H1 2010) (H1 2009: €24.2 million) and 3.5% on our H2 Financial Year to 31 March 2009 (€23.8 million)
• EBITDA up 8% to €4.3 million (H1 2009: €4.0 million)
• Post Contract Support (PCS) up 46% to €3.3 million (H1 2009: €2.3 million), which now increases our recurring revenue line to 13% of total revenue
• Adjusted Diluted EPS up 7% to 4.22 cents (H1 2009: 3.95 cents)
• Net cash inflow generated from operations of €4.7 million (H1 2009: €0.6 million)
• Net cash of €30.5 million (March 2009: €26.1 million).

Half Year Results

€m

H1 2010

H1 2009

%
change

Revenue

24.6

24.2

2%

EBITDA

4.3

4.0

8%

Adjusted Diluted EPS

4.22 cent

3.95 cent

7%

Cash Balance

31.7

22.8

Key business highlights for the period included the following:

• Norkom continues to execute and win new clients in its target regions with eight new clients added during the six months to 30 September 2009 (H1 2010), whilst it continues to expand its existing client relationships, which delivered 89% of total revenue during this period (H1 2009: 77%) through follow-on re-investment in Norkom’s solutions
• The Group’s most recent geographical expansion in to the Middle East continues as it has recently won its second and third new clients in the last 12 months in the region
• Its European region has grown from strength-to-strength, where revenue increased by 15% to €5.8 million (H1 2009: €5.0 million)
• Norkom’s focus on Fraud solutions continues to be rewarded and the company now has 22 clients as part of its franchise in this area (H1 2009:14)
• Its associate, Digital Harbor, has established itself as a serious contender in the healthcare fraud industry, closing two transactions during the period.
Commenting on the half year results, Norkom’s chief executive officer, Paul Kerley, said:

“We are clearly pleased to have produced these results particularly in a period of significant upheaval and crisis in our core market. Our capacity to expand our reach into new markets, while, in parallel, generating significant pull-through business from our existing clients, places the company in a strong position to capitalise on a return to normal buying behaviour in our market. While the crisis provided a challenge for Norkom, the strength of our market franchise, solutions and business model made it easier to withstand compared to some of our competitors, which have exited the market. With this market consolidation and the continued endorsement of our solutions by industry analysts, we expect to pick up a greater share of the returning demand in the market, underpinning our plans to return to normal levels of growth for Norkom.”